Recent Blog Posts
- Key Employment Laws for Financial Services Employees Published with Thomson Reuters Practical Law We published an article with Thomson Reuters Practical Law summarizing key employment issues for financial services employers, highlighting those rules applicable to registered representatives regulated by Financial Industry Regulatory Authority (FINRA). With Thomson Reuters Practical Law’s permission, we have attached it here.... More
- SEC Issues Largest Dodd-Frank Whistleblower “Bounty” Awards Ever On March 19, 2018, the SEC issued an Order jointly awarding two whistleblowers more than $49 million, and awarding a third whistleblower more than $33 million, for reporting information to the SEC that led to its successful prosecution of an enforcement action against the perpetrators of securities violations.
In 2010, the Dodd-Frank Act amended the Securities Exchange Act of 1934 to include Section 21F, entitled “Securities Whistleblower Incentives and Protection.” Among other things, Section 21F established a whistleblower “bounty” program that... More
- U.S. Supreme Court Settles Circuit Split: Dodd-Frank’s Anti-Whistleblower Retaliation Protections Do Not Extend To Employees Who Do Not Report To The SEC On February 21, 2018, the U.S. Supreme Court resolved a circuit split and ruled in Digital Realty Trust, Inc. v. Somers that Dodd-Frank’s anti-whistleblower retaliation provision (15 U.S.C. § 78u–6(h)) does not protect employees who report alleged securities violations only to their employers, and not to the SEC.
Paul Somers (“Somers”), a former Vice President of Portfolio Management for Digital Realty Trust, claimed that his employer violated the whistleblower protections of Dodd-Frank by terminating him in retaliation for complaining to management... More
- SEC Continues Aggressive Oversight of Separation and Confidentiality Agreements Last August, we reported on two significant cease-and-desist orders issued by the SEC that, for the first time, found certain language in the confidentiality and release provisions of separation agreements to violate the SEC’s Rule 21F-17(a), which precludes anyone from impeding any individual (i.e., a whistleblower) from communicating directly with the agency. Since then, the SEC has continued its aggressive oversight of separation and confidentiality agreements, with substantial repercussions for some employers. These orders, a select number of which we... More
- SEC Finds Certain Separation Agreement Provisions Unlawful Under Dodd-Frank Whistleblower Rule Twice in the past two weeks, the Securities and Exchange Commission (“SEC” or “Commission”) issued a cease-and-desist order settling proceedings against companies for using confidentiality and waiver of claims provisions in employee separation or severance agreements that violate an SEC rule promulgated after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The rule in question is designed to encourage and allow whistleblowers to freely disclose information to the SEC without impediments and ensure that they are... More
- SEC Makes Cybersecurity an Examination Priority for 2016 Businesses of all sizes and in virtually every industry face the daily threat of a data breach or other cybersecurity event, as well as the challenge of managing the potentially catastrophic economic and reputational harm that can flow from such an incident. Further complicating matters is that these threats can come from any number of sources: hackers, phishers, spammers, bot-network operators, spyware and malware authors, insiders, other nations, organized criminal groups, and terrorists. SEC regulations require registered financial institutions—including broker-dealers,... More
- Relaxed Legal Standards That Favor SOX Whistleblowers Do Not Leave Employers Defenseless Section 806 of SOX prohibits publicly traded companies, as well as their subsidiaries, contractors, subcontractors, and agents, from taking adverse personnel actions against employees for reporting activity that they reasonably believe constitutes mail fraud, wire fraud, bank fraud, securities fraud, or a violation of any Securities and Exchange Commission (“SEC”) rule or federal law relating to fraud against shareholders. In recognition of the legislative intent underlying SOX—to provide strong and broad-based protections for employees who report suspected securities violations and... More
- Proposed “Whistleblower Augmented Reward and Nonretaliation Act” Aims to Increase Protections for Financial Industry Whistleblowers On February 25, 2016, Congressman Elijah E. Cummings (D-MD) and Senator Tammy Baldwin (D-WI) introduced the Whistleblower Augmented Reward and Nonretaliation Act of 2016 (or WARN Act of 2016) (pdf). The bill proposes expanded protections for individuals who blow the whistle on financial fraud and securities violations and, if enacted, could have significant implications for financial services employees and employers alike. Specifically, the WARN Act of 2016 aims to strengthen the protections and incentives available to financial crimes whistleblowers by... More
- Whistleblowers Under Sarbanes-Oxley and Dodd-Frank – Employment Law This Week As we mentioned before the holiday, I was recently interviewed on our firm’s new video program, Employment Law This Week. The show has now released “bonus footage” from that episode – see below.
I elaborate on my recent post with Jason Kaufman, “2nd Circuit Expands Dodd-Frank Anti-Retaliation Protection to Cover Internal Whistleblowing.”
- 2nd Circuit Expands Dodd-Frank Anti-retaliation Protection To Cover Internal Whistleblowing On September 10, 2015, the Second Circuit Court of Appeals ruled in Berman v. [email protected] LLC that an employee who reports an alleged securities violation only to his or her employer, and not to the SEC, is nevertheless covered by the anti-retaliation protections afforded by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”).
Berman, a former finance director of [email protected], claimed that his employer and its corporate parent, WPP Group USA, Inc., violated the whistleblower protections of... More